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Last week was one of those 4 times per annum we get to see some Warren Buffett stock moves. Berkshire Hathaway released its quarterly report in which it details some (but not all) of its buys and sells. Investors take moves he makes as a massive sign of confidence in the prospects of these companies, although of course, it doesn’t always go to plan. Let’s look at 5 notable moves he made in the last 3 months.
Overall, the firm sold US$7bn in shares and bought US$1.7bn, so Buffett is clearly more bearish than bullish. At the same time, his cash pile of US$156.8bn is easily dwarfed by his US$318.6bn equity portfolio. So clearly, he still could see some opportunities.
5 Warren Buffett stock moves made in the last quarter
Buying Sirius XM
Hey Siri, what is SiriusXM? It is a Manhattan radio broadcaster that specialises in sport. Warren Buffett bought 9.7m shares in Sirius, worth US$43.8m at the end of the period.
This is a surprising buy because Sirius has performed poorly. Nonetheless, it reported a beat on its earnings in its 3Q results, bucking industry trends. And perhaps as Bufett himself said, the way to become rich is to be greedy when others are fearful.
Buying Atlanta Braves
In the US, most sports teams are privately owned, although the 2021 World Series winners are actually a listed company since Liberty Media spun it off. Despite teams not having sponsors, baseball teams are very well off with merchandise and media revenue more than making up for it. The Braves made US$272m in Q3 despite failing to replicate its success of the year before.
Buffett has actually had links to baseball in the past, at one point having a minority ownership stake in the Omaha Storm Chasers, a Triple-A affiliate of the Kansas City Royals.
Selling out GM
Let’s move onto the sales and this one is the most notable. ‘In its heyday, General Motors was a great company — it just gradually went to hell one contract at a time,’ Warren Buffett was quoted as saying earlier this year. We can only speculate on the reasons why he waited until now to pull the trigger now because these were not revealed in Berkshire’s earnings call.
However, we think there are two reasons. First, the US automaker recently forecast that a strike by autoworkers would cut pre-tax earnings by about US$800m. And second, it remains uncertain as to how GM will handle the EV transition. No, it will not go out of business because of it, but it will be more difficult for it to stand out in a crowded market.
Buffett sold his entire US$850m stake, and although it is a small portion of Berkshire’s US$313bn portfolio, it is one of several bluechip stocks he is cutting back on.
Selling out of UPS
This is another company Buffett got rid of. UPS (short for United Parcel Service) is up 34% in 5 years but down 16% in 1 year. There was a massive windfall when the world embraced eCommerce amidst the pandemic. For the last couple of years, however, investors have realised once again that eCommerce is a low-margin and highly competitive space to be in
In its most recent results, the company beat earnings estimates, but missed revenue estimates. It blamed macroeconomic conditions weighing on demand. You could argue that US inflation coming under control could help its cause, but it doesn’t solve the problem that is Seattle’s Great White Shark getting larger and larger.
Selling Procter & Gamble
This company sells consumer products and is a market leader. So theoretically it should be a good performer. This company has gained 7% in 2023, but this is barely half of the S&P 500’s gain.
The company’s results have not been terrible, although its growth has slowed as it rolled out price increases while consumer spending has been under pressure. You could make the case that it will bounce back in due course as inflation moderates. Either Warren Buffett doesn’t think so, or just sees better opportunities elsewhere.
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